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2025-09-17 11:29:32
[The US Dollar Continues to Under Pressure on Rate Cut Expectations, with Markets Focusing on Powell's Speech] 1. The US dollar rebounded modestly by 0.1% in Asian trading on Wednesday, but remained weak, hovering at a four-year low against the euro and briefly falling to a one-month low against the yen. Traders widely expect the Federal Reserve to announce a rate cut later in the day, and market attention has shifted to Chairman Powell's post-meeting remarks to gauge the future path of monetary policy. Markets currently expect a cumulative rate cut of nearly 68 basis points by year-end. 2. With the Trump administration's continued pressure on the Federal Reserve, raising concerns about its independence, the tone of the policy statement and Powell's speech are crucial. An unexpected 50 basis point rate cut or a clearly dovish signal could further weaken the dollar. Conversely, a more hawkish stance could trigger a rebound. The US dollar index is currently trading around 96.71, close to its lowest level since July. 3. ING economists note that the real market influence may lie in the unexpectedly strong policy intensity or the direction of Powell's speech. They believe that "even if the interest rate is only cut by 25 basis points, if it is combined with dovish guidance, the dollar's weakening trend may continue." In addition, personnel changes and political pressure within the Federal Reserve also add uncertainty to this meeting. 4. The market is also paying attention to the Bank of Japan's interest rate decision on Friday, which is expected to keep the interest rate unchanged. With the October Liberal Democratic Party presidential election approaching, the possibility of policy changes is low. Analysts generally believe that the Bank of Japan's next interest rate hike is more likely to occur in early 2026.
